Archive for the 'Finances' Category

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Congratulations and some worried thoughts

Published by on 25 November 2007 at 17:01 in 501c3, Casey Fenton, Corpganization, Donations and Finances. 6 Comments

If you are a member of CS, undoubtedly you have received an email from Casey Fenton himself announcing the new 501(c)3 status. The email seemed a bit confusing, because the envelope he’s holding is obviously the application to the new status, but then it seems implied CS is already a 501(c)3? I have no idea how fast the US bureaucracy works, but it seems awfully fast from application to acknowledgment. Is CS applying for it or is it already a charity? Is the outcome guaranteed?

However, congratulations are in order. After 3 years of talking about it and no less than 100 hours of work by Casey himself (a full two and a half weeks!), they were finally able to get the right papers in order. Phew. Good news is that CS is now eligible for grants and your donations will be tax deductible (if you live in the US). There is money to be made!

Since we can take at least a bit of credit for speeding the process up, basically by shaming Casey into action, here are some of the things I would like to see CS take up:

Reduce the operational cost and significantly reduce the cost of “verification”, far beyond the sliding scale idea. There is absolutely no obvious need to be collecting and spending such a large amount of money. It is almost the anti-thesis of an organization that is based on free and voluntary lodging and low-cost traveling.
Finally make the organization reflect the community. Get rid of the heavy US centric distribution in the leadership team. Organize elections.
Set up localized non-profit organizations, to allow the same financial and legal “benefits” for European CS-ers (the largest community in any case) and to allow a better local functioning.
Open up, become at least a bit more transparent. Get rid of the multitude of private groups. Publish meeting agenda’s, publish regular and non-PR reports.
Give back to the world. Share the code that so many people have worked on voluntarily or payed for by the community back to that community and to the world at large.
Cooperate. Finally get over your pride and cooperate with HC and BeWelcome. Not a single one of the users benefits from the fragmentation and competition between the different hospitality organizations.
Learn to be humble. Learn how to admit mistakes when you make them instead of lying about it or covering it up. Talk to people like the OCS-ers, even if every fiber in your body seems to struggle against that. You fears are unfounded.

My 7 wishes for CS in 2008.

Thomas

Reasons for not using CouchSurfing.com

Published by on 07 November 2007 at 17:47 in Casey Fenton, couchsurfing, Donations, employees, Finances, Leadership Circle, legal, Participation and Uncategorized. 91 Comments

To preserve this information in case of a decision by the CS ‘leadership’ to suspend my profile for having the wrong hairdo or something, and because OCS attracts more readers than my CS profile, what follows is my current list of 10 reasons for not using CouchSurfing.com. It is personal, not exhaustive, and contains little explanation. Still, I hope it will give first-time visitors to this website some kind of overview of all that is wrong with CouchSurfing.com. Comments and additions (and corrections if factually incorrect!) are much appreciated.

The company that owns CouchSurfing.com, CouchSurfing International inc., is privately owned and has Casey Fenton as is its sole owner and director. He holds all power over the company and, consequently, the website. This means that, when push comes to shove,
1. He cannot be held accountable for how donations are spent
2. He can sell CouchSurfing.com to whomever and walk away with the dough whenever he gets tired of it
3. CS users have no of influence whatsoever on anything CS-related
Although incorporated as a not-for-profit, CouchSurfing International inc. is not a charitable organisation. Not-for-profit status only means that the company cannot pay dividend to its owners (i.e. Casey); the company and its assets still are his, and his alone. Casey can do with it whatever he wants, whenever he wants it
1. In addition, not-for-profit status does give not any kind of guarantee that company assets are not utilised for personal enrichment. For instance, as its sole owner/director, Casey can give out loans to himself or others at zero-interest rates, and use that money privately to make a profit
2. Such potential abuse of company assets is even easier because CouchSurfing International inc. does not appear genuinely interested in obtaining a “501c3″ tax exemption. Non-profit organisations can easily apply for this designation with the IRS, but it requires compliance with strict disclosure and reporting duties, plus having a board of directors, and Casey doesn’t like that much openness. Therefore, part of user donations is waisted on avoidable tax-paying
3. Most importantly, CouchSurfing International inc. does not have a clause in its bylaws that irrevocably dedicates company assets to a charitable cause. This means that Casey can always revoke the company’s not-for-profit designation and cash in, by volition but also by necessity (for instance, when he or the company ever get sued for damages)
In clause 5.1 of the Terms of Use, CouchSurfing International inc. claims a virtually unbounded and irrevocable right to use whatever material you decide to upload to its servers for its own purposes, without limiting these in any way. This opens up the road to selling user data, including your contact and site usage details, to third parties. At the same time, CouchSurfing International inc. does not have a published policy detailing how they keep your personal information safe
There are no published protocols how the company deals with users committing crimes (violence, abuse, theft…) that involve other users; instead, these appear to be dealt with in an ad hoc fashion. In addition, it is extremely difficult to find who’s responsible for what when it comes to safety. By being so negligent, CouchSurfing International inc. puts the users of CS at risk
On the whole, CouchSurfing.com scores very poorly on transparency. There are hardly any protocols about anything; there is no full list of people on the payroll of CouchSurfing International inc., information is scattered across countless forums and scores of mailgroups, etc. The current management seems to take no interest whatsoever in even starting to improve this situation
Apart from being fraudfully sollicited (i.e., under the pretext that CS is a charity / non-profit), aspiring volunteers are asked to sign a non-disclosure agreement in which they cede all rights on the material they develop to CouchSurfing International inc.
All known employees of CouchSurfing International inc. (i.e., Casey Fenton, Matthew Brauer, Jim Stone and Weston Hankins, all of whom are members of the Leadership Team) are male caucasian US citizens.
The verification procedure is a blatant scheme for increasing donations. It does not offer any kind of added security, and could be carried out at a fraction of the current fee
What little financial information is available gives cause for suspicion. There are interesting discrepancies between assets and interest gained, and attempts to get this clarified are met with deafening silence
Casey and the other employees of CouchSurfing International inc., as well as the influential volunteers in CouchSurfing.com simply do not respond to any kind of question or criticism at all, while still hammering on CS being a community-thing

Shouldn’t Donna think of cooking the books?

Published by on 05 November 2007 at 17:22 in 501c3 and Finances. 6 Comments Tags: Donna.

*corrected version*

How I just love retired accountants! It seems that Pickwick is on to another scandal…

According to the (minimal, and legally insufficient) financial reports over the 3rd quarter 2007, CouchSurfing International inc. is well in the dough, and has a neat $101,900.69 in the bank… but wait a second, over that sum, why has the company made only $281.26 interest??!!

I know banks in the US are in a difficult position these days, but an interest rate of less than 0,27% seems pretty strange… Or could it be that someone is turning a private profit on these funds? Nah, that would be ridiculous, CS being a ‘non-profit’ and all…

Pickwick: Difference between non-profit and charity

Published by on 26 October 2007 at 13:18 in 501c3, Casey Fenton, Finances and Transparency. 16 Comments Tags: 501c3, casey, charity, non-profit, salary, tax.

Pickwick about the difference between a non-profit organization and a charity:

A charity needs to be non-profit, but not every non-profit organisation is automatically a charity.

A Non-Profit Corporation can’t pay the owner a dividend. He has to pay himself (or others) a salary instead, which he does ($88,150.22 since 2005, for salaries, payroll taxes, and temporary help). The rest of the money needs to be piled up on the company’s books: there’s an ‘emergency fund’ of $30,000 and accumulated ‘net income’ of $40,135.89 from 2004 to date. Other than that, a Non-Profit Corporation, which is NOT a charity, can do whatever it wants with its money like any other privately owned company. This includes the possibility of one day dissolving the company, or changing its status to For-Profit, and cashing in.

A CHARITABLE non-profit corporation will have a clause in its corporate bye-laws where corporate assets are dedicated to charitable purposes. It receives tax privileges, and in exchange comes under public supervision and is subject to reporting and disclosure duties. It will be much more difficult for individuals to profit, and if done right, even impossible.

The confusion is understandable because colloquially the terms ‘charity’ and ‘non-profit’ are sometimes used as if synonym. The problem here is that this misunderstanding might be intentionally exploited. Ultimately the proof whether an organisation is or isn’t a charity lies in the public register of charities, both on State and Federal level, neither of which contains an entry for this company.

So the logical conclusion is that either it is NOT a charity and claims that it is are false, or it IS a charity, in which case it has not complied with registration, reporting and disclosure duties. In either case, as a NON-charity, or as a NON-REGISTERED (unrecognised) charity, any charitable solicitations, for money or volunteers’ time, might be illegal.

Casey, please comply with the law

Published by on 11 October 2007 at 09:18 in 501c3, Casey Fenton, Donations and Finances. 10 Comments Tags: 501c3, legal, pickwick.

Please note that this post does not necessarily reflect views shared by all OCS posters and sympathisers. I put it here on my own initiative.

Norbert has placed the following post in the brainstorm forum on CS. I felt it should be cross-posted here, so that it can be given due public support by those who feel that’s appropriate. It sure has mine!

“This is my final appeal to Casey and the Leadership Team. I haven’t filed my report yet with the Attorney General of New Hampshire. I would prefer not to do it. I don’t like the role. And I don’t like the fact that this may divert resources into legal procedures, costs, and possible fines. Don’t get me wrong, though: I’m not making any excuses for myself. I will do it if I have to, whether I like it or not. It will not be my fault for reporting it, but the fault of those who broke the law. Yet I feel there is still time to ‘heal’ the situation. CouchSurfing has been represented as a charity without being one, and has thus violated the law. It has failed to comply with registration, reporting and disclosure duties. It has obtained donations of money, time and skills under false pretenses. It has broken the law. It has done the wrong thing. The best defence against those charges obviously is to make it a real charity immediately. That would not undo the legal violations, but it would make them ‘technical’ rather than substantial, and I suppose they could then be overlooked.

This would have to be done with credibility. Mere words will no longer be enough, especially when they are cold, and don’t show an intention to reach out. It would be good to hear an admission of mistakes here and there, or at least an acknowledgment that help from members could be useful. I would like to see the true message of strength from the Leadership Team that comes with admitting they’re not perfect. How could they be? They are mostly young, motivated people, at the beginning of their professional lives, working for us in exchange for a bag of peanuts! So be who you are; don’t claim to be Bill Gates! If you say: this is what I’m good at, and here’s where I need assistance, people will come and help you. If you claim to be perfect, and are arrogant with it, people will try to prove you’re not so perfect after all. If we disagree, by all means do it your way, and not mine, as you’re the ones doing the work, but don’t lie and don’t bully.

I believe a genuine charity is the best way forward, as it will allow motivating future volunteers. This organisation has to spend a lot of time and effort on finding out what it wants from volunteers, and more importantly: what it wants to offer them. It needs to learn urgently that volunteering is a give and take situation, and not a one way street. That doesn’t negate that many volunteers are perfectly happy. They have found rewards for their work, mostly in their own local communities. But that is their own achievement, just like the volunteering itself. The organisation does not seem to be offering much. Where’s the volunteer training? Where are the written testimonials given for thousands of hours of dedicated services, that people might use for job applications in their CV, proving they exercised and acquired skills? Instead cold emails are sent out that “your services will no longer be retained due to personal differences”. Wrong way. Volunteers need to be at the very heart of the organisation. Please treat them as ‘human resources’, not as free labour without minds. I fear there is no ‘healing’ of the wounds suffered by some ex-volunteers, as some of them seem too deep. The effort here will need to be: not to let it happen again.

CouchSurfing, and a number of individuals, may face serious legal consequences, and real pressure can be put on you to honour your word and become a charity. That will happen unless you make it obsolete by doing the right thing now. You can’t, however, be forced legally to put the word ‘irrevocable’ in your bye-laws asset dedication, but you may realise it’s the ‘open sesame’ that leads forward and restores trust. In any event, the obligations that come with genuine charity status (irrevocable or not) to adopt acceptable (team) corporate governance instead of a one-man-band, to have annual reporting and disclosure duties, in other words: public supervision, will be a huge improvement. It will be both: control and support mechanism, to ensure you’ll do the right thing. Please do it.”

What do the LT actually do?

Published by Callum on 02 October 2007 at 16:00 in 501c3, Board of Directors, Casey Fenton, employees, Finances, general director, Jim Stone, Leadership Circle, Matthew Brauer, NDA, Transparency and Volunteer coordinator. 7 Comments Tags: Casey Fenton, couchsurfing, Jim Stone, Mattthew-Brauer, OpenCouchSurfing.

We used to get the excuse “Casey is too busy”. Now we get the excuse “The LT is too busy“. This begs the question, too busy doing what?

CouchSurfing now has 4 full time, paid members of staff. That’s a 300% increase in professional resources within the organisation. What exactly are all these professionals doing?

Here’s a few things they’re not doing which they could be doing.

Publishing finances, up to the minute (it’s really not hard)
Getting 501(c)(3) status (again, really not hard)
Publishing LT meeting minutes (extremely easy)
Getting a new NDA sorted (seriously, it doesn’t take 15 months)

Perhaps they’re too busy partying, having threesomes, burning da man, banning people from the wiki, spreading the verification disease, etc. Who knows eh?

“Run the show how you think you must…”

Published by on 30 September 2007 at 20:51 in 501c3, Casey Fenton, Collective, employees, Finances, Participation, Transparency and Volunteer coordinator. 2 Comments Tags: attorney_general, casey, Collective, shame, show, thai, volunteering.

I might have used other words, and I definitely don’t have the skill to do (or bluff?) this sort of stuff, but I’m not unhappy to see that Pickwick is seriously kicking some butt:

It’s getting heart breaking in here. And cold. Icy cold. All the ‘open source’ and ‘charity’ debate left me disagreeing, but unhurt. This Thai project does me in.
www.couchsurfing.com/collective_thailand_application.html

First the cold, demanding, uppity language itself. Then what looks like a “suck ‘em dry & spit ‘em out” attitude of present and future ‘Volunteer Coordination’. Then the cynicism luring generous, well meaning people to commit crimes and risk jail for lying to immigration police in a post 9/11 world.
www.couchsurfing.com/group_read.html?gid=429&post=401914#pos…

Shame on you. Shame on those who do it. Shame on those who sit close by and watch in silent complicity. It’s time to hold Casey & Friends accountable, if not to members, then at least to the law.

The Royal Thai Government have received a formal query about the immigration requirements for the project. They know you are coming, so you better cut out the criminal part of your plan.

The charity question needs a decision. Casey opened his mouth in 2003, and he now either sings, or shuts it again. No more smoke screens. Run the show how you think you must, but run it well, and stop lying. A thoroughly documented formal query about possible Unlawful Charitable Solicitations will be placed before the Attorney General of New Hampshire “practically tomorrow”. My advice: hurry and be there first, with a genuine charity.

Why I don’t take part in the survey …

Published by on 18 September 2007 at 22:48 in couchsurfing, CouchSurfing Wiki, Finances, Jim Stone, Leadership Circle, Participation and Transparency. 4 Comments

There is this fancy survey, where we can choose some questions, which will be presented to the Leadership Circle. Maybe they even answer to it. I don’t count on it. And I don’t want even think about it, but as this posting shows: I failt. But:

Why limit the number of questions at all?
A leadership circle of 13 people plus 3 paid employees plus tons of volunteers should be able to answer 10times so many questions.
Some of the answers should have been published anyway (yes, without being asked).
While the most of the Leadership Circle plays “dead man”, Jim gets paid to spent time for complaining about not having time, blocking people from the wiki and developing the cs-haters conspiracy theory. I guess, simply answering questions would need less time.
Statistics? wouldn’t be the first time someone lies about numbers at cs (funny enough: Mikky says so). So even if there is a reaction it would be easy to call it a minority issue. (In my opinion some of the questions really are, but that’s not a reason not to answer them.)

It’s not a matter of choosing the right questions or limiting them to a smaller number. Or presenting them from a Survey. Again it’s a matter of the Leadersship Circle’s will to communicate with the users and if they want to make their work transparent (or at least visible).

To me the survey is completely ridiculous.

The Next CS Collective

Published by on 13 September 2007 at 06:24 in Collective, employees, Finances, Leadership Circle, Participation, volunteer coordination and Volunteer coordinator. 11 Comments Tags: accepting, airfare, Collective, couchsurfing, full_time, leadership_team, strict_laws, thailand.

Read it first on OpenCouchSurfing: The Next CouchSurfing Collective will be in… Thailand!

CS is “accepting applications for a small number of specific positions, including a full-time House Manger whose airfare to Thailand will be paid by CouchSurfing.”

I hope the Leadership Team is aware of the very strict laws in Thailand.

CS organisational policies vs the risk of litigation

Published by on 10 September 2007 at 22:09 in 501c3, Donations, Finances, Leadership Circle and Transparency. 2 Comments Tags: 501c3, casey, Donations, Finances, leadership, legal, liability, litigation.

As posted in the politics and policy group

As Norbert points out here, the LT’s apparent unwillingness to make haste with the 501c3 application for tax exempt status, as well as their unwillingness to publish corporate bylaws or make drafts of these available for discussion, may well be construed as an (attempt at) fraud, because donations and services are and have been obtained under the (currently false) pretense that CS is a charity.

Needless to say, this renders CS extremely vulnerable to all sorts of liability suits, interestingly of the kind that is likely not to be covered by the ToA. Basically, any user who has donated volunteer work or money (besides the verification fee) to CS can claim that he has been the victim of this fraud; add to this the easy access to legal representation in the US (due to no cure, no pay) and Norbert’s prediction that liability is likely to extend to all natural persons working in, and owning CS, and you can easily grasp the size of the time bomb Casey’s currently sitting on.

And how do you reckon that Casey, Jim and Mattthew were to produce the funds needed for compensation if this happens? Precisely, from the sale of CS to a commercial third party, which is entirely within Casey’s right…